Energy investment hampered by poor policy thinking

National energy policy is suffering from an over-application of cure without an accurate diagnosis of the disease, which is doing little to create the certainty needed by investors, APGA Chief Executive Officer Steve Davies said today.

Speaking at the Australian Domestic Gas Outlook Conference in Sydney, Mr Davies said the real key to ensuring the nation had reliable and affordable energy in a lower-emissions future would be to neutralise the politics in the debate.

“Our energy market, with a separate rule-maker (AEMC), regulator (AER) and operator (AEMO) has been structured to avoid some of the pitfalls that accompany knee-jerk political responses to the issues of the day,” he said.

“Unfortunately, the intense political focus on energy prices has short-circuited the governance arrangements and seen many new reforms lobbed in without a full consideration of the consequences.

“For example, the federal government has recently introduced a program to support investment in dispatchable power. The program is technology neutral in design, which is a plus.

“It guarantees it will pay a floor price on projects after five years in order to help energy investors secure the loans they need to construct the projects they believe will give them a return over a decade or two.

“However, there is a lot less interest now in talking about contracts longer than five years, and this is making it harder to get projects over the line that, in the absence of government policy, would have probably been able to secure funding."

Read the Energy investment hampered by poor policy thinking media release.